FACTSHEET

Key facts

  • The overall NHS expenditure on medicines in 2012 was £13.3 billion.
  • In 2012 hospital use accounted for 36.5 per cent of the total cost, up from 33.3 per cent in 2011.
  • The cost of medicines rose by 1.5 per cent overall but by 11.1 per cent in hospitals.
  • Of the drugs positively appraised by NICE, the greatest overall cost was for adalimumab (Humira), which also incurred the greatest cost in hospitals.

NHS England Drug Expenditure

When the NHS was launched in 1948 it had a budget of £437million (roughly £9billion at today’s value). For 2011/12 it was around £106 billion. This equates to an average rise in spending over the full 60-year period of about 4% a year once inflation has been taken into account. However, in recent years investment levels have been double that to fund a major modernisation programme.

Some 60% of the NHS budget is used to pay staff. A further 20% pays for drugs and other supplies, with the remaining 20% split between buildings, equipment, training, medical equipment, catering and cleaning. Nearly 80% of the total budget is distributed by local trusts in line with the particular health priorities in their areas.

The money to pay for the NHS comes directly from taxation. According to independent bodies such as the King’s Fund, this remains the “cheapest and fairest” way of funding health care when compared with other systems.

Overall, drug expenditure represents about 10% of NHS drug expenditure. Following the 2010 General Election, the coalition government agreed that all NICE approved drugs should be made readily available to all NHS England patients, irrespective of where they live, and as a direct consequence there has been a steady increase in the value of drugs issued in hospitals (secondary care). This equates closely with the fact that the newer drugs positively appraised by NICE tend to be very expensive in terms of acquisition cost (i.e. trade price to the NHS).

Primary Care

1,000.5 million prescription items were dispensed overall, a 4.1 per cent increase (39.0 million items) on the previous year and a 62.2 per cent increase (383.5 million items) on 2002. This equates to approximately 2.7 million items every day, or over 1,900 every minute. The average number of prescription items per head of the population in 2012 is 18.7, compared to 18.1 items in the previous year and 12.4 in 2002.

The total Net Ingredient Cost (NIC) of prescriptions dispensed was £8.5 billion, similar to the total cost of prescriptions in 2009 and a 3.2 per cent fall (£281.9 million) on the previous year. In 2002 this figure was £6.8 billion. The average cost per head of the population has fallen to £159.33, from a peak of £167.80 in 2010. In 2002 the average cost per head was £137.80. The average net ingredient cost per prescription item has fallen from £9.16 in 2011 to £8.52 in 2012. In 2002 this figure was £11.10.

The fall in cost is partly due to the expiry of patents for several leading medicines and the use of less expensive generic alternatives. For example, the cardiovascular drug Atorvastatin where costs fell by £144 million between 2011 and 2012, from £310.9 million to £166.6 million.

The leading BNF Section in terms of in terms of net ingredient cost, now for the sixth year in succession, is Drugs used in Diabetes. Costs increased for this section by 2.2 per cent (£16.2 million) from 2011 to £767.9 million in 2012. The number of prescription items dispensed rose by 5.4 per cent (2.2 million) from 2011 to 42.2 million in 2012.

The BNF Section with the largest increase in cost between 2011 and 2012 was Antibacterial Drugs, where costs rose by £25.1 million (14.8 per cent) to £195.4 million. The number of items dispensed increased by 2.5 million, (6.1 per cent) to 43.3 million.

A new collection of data on prescriptions dispensed free of charge shows that over 90.6 per cent of all prescriptions were dispensed free of charge. Sixty per cent of items were dispensed free to patients exempt from the prescription charge because of old age (aged 60 and over) and five per cent went to the young (aged under 16 or 16-18 and in full-time education) who are also exempt from the charge

Table 1. Top Drugs By Cost Prescribed In Primary Care 2012

RANK

DRUG

BRAND ONLY

NIC £ ( thousands)

1

Fluticasone /Salmeterol (Seretide, GSK)

Y

377,379

2

Pregabalin (Lyrica, Pfizer)

Y

181,431

3

Tiotropium (Spiriva, Boehringer Ingelheim)

Y

169,351

4

Atorvastatin

N

166,393

5

Budesonide/Formoterol (Symbicort, Astra Zeneca)

Y

159,567

6

Metformin

N

84,007

7

Quetiapine

N

79,920

8

Co-codamol

N

78,691

9

Insulin Glargine (Lantus, Sanofi-Aventis)

Y

77,979

10

Paracetamol

N

71,658

11

Levothyroxine

N

70,325

12

Candesartan

N

69,483

13

Influenza Vaccine (various)

Y

69,418

14

Buprenorphine inc Naloxone preps

N

68,730

15

Insulin Aspart (Novorapid, Novo Nordisk)

Y

66,661

16

Omeprazole

N

65,692

17

Ezetimibe (Ezetrol, MSD – Schering Plough))

Y

62,071

18

Solifenacin (Vesicare, Astellas)

Y

59,615

19

Sitagliptin (Januvia, MSD)

Y

59,488

20

Simvastatin

N

56,406

21

Fentanyl

N

56,070

22

Bispasic Insulin Aspart ( Novomix, Novo Nordisk)

Y

55,850

23

Goserelin (Zoladex, Astra Zeneca)

Y

53,158

24

Monteleukast (Singulair, MSD) *

Y

51,715

25

Rosuvastatin (Crestor, Astra Zeneca)*

Y

49,906

26

Fortisip Enteral Nutrition (Nutricia)

Y

47,990

27

Donepezil

N

44,542

28

Oxycodone

N

44,196

29

Salbutamol

N

43,084

30

Insulin Detemir (Levemir, Novo Nordisk)

Y

41,726

31

Ensure Enteral Nutrition (Abbott)

Y

41,148

32

Aviva Testing Strips (Roche Diagnostics)

Y

38,530

33

Insulin Lispro (Humalog, Lilly)

Y

37,925

34

Liraglutide (Victoza, Novo Nordisk)

Y

33,153

35

Morphine

N

27,328

36

Gabapentin

N

25,334

37

Methadone

N

24,059

38

Exenatide (,Byetta, Lilly)

Y

21,083

39

Olanzapine

N

16,705

Note:

(*) The patents for these medicines will expire in the following year, so NHS spending on these brands will be significantly lower.

Net Ingredient Cost (NIC) refers to the cost of the drug before discounts and does not include any dispensing costs or fees. A dispensing contractor (eg. a Pharmacy) will typically have 9-10% of the NHS reimbursement price (trade price) clawed back by the Department of Health, as it is assumed that the contractor will have negotiated a discount with their pharmaceutical wholesaler.

It does not include any adjustment for income obtained where a prescription charge is paid at the time the prescription is dispensed or where the patient has purchased a pre-payment certificate.

Table 2. Top 10 medicines by cost for medicines positively appraised by NICE issued

in hospital in 2012

DRUG NAME

NHS Cost £ (thousands)

Adalimumab (Humira,AbbVie)

251,716.20

Etanercept (Enbrel, Pfizer)

202,720.60

Ranibizumab (Lucentis, Novartis)

193,525.30

Rituximab (MabThera, Roche)

121,740

Infliximab (Remicade, MSD)

121,653.20

Trastuzumab (Herceptin, Roche)

110,522.50

Lenalidomide (Revlimid, Celgene)

83,367.80

Imatinib (Glivec, Novartis)

59,906.80

Docetaxel (Taxotere, Sanofi-Aventis)

57,367.40

Oxaliplatin (various generic)

46,403.50

Sources:

The NHS Information Centre http://www.ic.nhs.uk/

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